Bywater was poised to move to White Hart Lane after the clubs agreed a fee, believed to be in the region of £2.5 million last week.
The 27-year-old former Cardiff, Wycombe and West Ham keeper had a medical at Tottenham but the north London club have pulled the plug on the deal.
Bywater joined Derby from Coventry for £2.25 million two years ago, but he spent much of last season on loan at Ipswich. He is now back training at Pride Park and Jewell is happy to have him challenging Roy Carroll for a first team place.

‘I got a phone call to say for whatever reason the deal had fallen through but it was nothing to do with Stephen,’ Jewell said.
Bywater was on his way to London to complete the deal when Spurs boss Juande Ramos called off the transfer. (Daily Mail)

As reported here some days ago, it had appeared that the former West Ham keeper Bywater was being, incredibly, considered as a potential signing at White Hart Lane. Clearly Juande decided in the end that such a move would be disastrous and has pulled the plug on the move. Where does this leave Bywater, well more than likely it leaves him on the bench at Pride Park behind serial bungler Roy Carroll which I think says it all! Are Spurs fans glad that this deal fell through?